BEFORE THE STATE TAX
COMMISSION OF UTAH
_____________________________________
XXXXX
Petitioner, : INFORMAL DECISION
v. :
COLLECTION
DIVISION OF THE : Appeal No. 87-0116
STATE TAX
COMMISSION OF UTAH, ) Acct. No. XXXXX
Respondent. :
_____________________________________
STATEMENT OF CASE
This
is an appeal to the Utah State Tax Commission from a decision of the Collection
Division of the Utah State Tax Commission(Respondent) to assess a penalty on
the additional tax due as a result of an audit covering the period XXXXX. An Informal Hearing was held on XXXXX, in
the offices of the Utah State Tax Commission.
David J. Angerhofer, Hearing Officer, heard the matter for the Commission. XXXXX represented the Petitioner. As a result of an audit covering the period
from XXXXX, it was determined that an additional tax of $$$$$ was due. Respondent assessed a penalty of $$$$$ and
interest of $$$$$ on the delinquent tax.
Petitioner noted that XXXXX was incorporated in XXXXX and began business
in Utah in XXXXX. Petitioner stated
that this was a first time audit for the company and that, according to Tax
Commission auditors, the penalty should not be assessed on first time
audits. Petitioner also stated that,
according to Tax Commission Use Tax Regulation U8, a penalty is imposed if a company is negligent or
intentionally disregards the rules and regulations. The additional taxes do not arise from negligence or intentional
disregard. Petitioner requests waiver
of the penalty.
FINDINGS
The
present Commission does not have a policy of waiving the penalty on first time
audits. Although this may have been an
informal policy under a prior Commission in situations involving minor amounts
of tax, there is presently no rule, regulation or statute which would justify
such a reduction. The present Commission finds that a first time audit is not
sufficient justification to warrant the waiver of penalty. The Commission finds that Petitioner was negligent
in failing to timely file the tax in question. Although this is the first audit
of XXXXX, Petitioner shares management with other XXXXX and should have been
aware of the law in Utah. In addition,
the additional tax assessed represents a very large percentage of the total tax
liability for this period. Petitioner
had the burden of proof to establish that Respondent assessed the penalty in
error. Petitioner failed to meet this burden of proof.
DECISION AND ORDER
It
is the Decision of the Utah State Tax Commission that Petitioner's request for
waiver of penalty on sales and use tax account No. XXXXX for the period XXXXX
be denied. The assessment of penalty
and interest by the Collection Division of the Utah State Tax Commission is
hereby affirmed.
DATED
this 7 day of August, 1987.
BY ORDER OF THE STATE TAX COMMISSION OF Utah
R. H. Hansen G.
Blaine Davis
Chairman Commissioner
Joe B.
Pacheco Roger
O. Tew
Commissioner Commissioner